LONDON — Copper prices rose on Wednesday as risk appetite gained the upper hand in financial markets after promising trials of a COVID-19 treatment and strong U.S. economic data.
The World Health Organization moved to update guidelines regarding a cheap, common steroid that can help to save critically ill patients, while data showed that U.S. retail sales increased in May by the most on record.
“Yes, of course there are definitely signs of hope, giving the potential of still higher prices, but there are many risks out there that are being completely ignored,” said Commerzbank analyst Daniel Briesemann.
“I think the high prices are not justified, but given the good mood of the market, which is also evident in sharply rising share markets, prices will find it difficult to come down significantly.”
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LME copper touched a 4-1/2 month high last week after rebounding about 30% from March lows.
Limiting the upside was news that Chinese capital Beijing has extended curbs on movement to contain a coronavirus outbreak that has fanned fears of wider contagion.
* ALUMINIUM SPREADS: LME cash aluminum’s discount to the three-month contract had declined to $20.50 a tonne by Tuesday’s close, its weakest in three months, indicating tighter availability of metal in LME warehouses.
* TIN OUTPUT: The world’s largest tin producer, PT Timah, is targeting refined tin sales of about 55,000 tonnes in 2020, down from 2019 sales of 67,704 tonnes.
LME tin added 0.4% to $16,980 a tonne.
* CHINA: A report by auditor EY found that Chinese copper smelter Shandong Fangyuan Nonferrous Metals Group has been overstating profit and production while understating its debt, two sources said.
* PRICES: Zinc was the biggest gainer on the LME, climbing 1.5% in official activity to $2,025.50 a tonne while lead rose 1.2% to $1,783.50, aluminum edged up 0.2% to $1,600 and nickel shed 0.6% to $12,948. ($1 = 7.0881 Chinese yuan renminbi)